Big Seed: How The Industry Turned From Small-Town Firms To Global Giants | KERA News

Big Seed: How The Industry Turned From Small-Town Firms To Global Giants

Apr 6, 2016
Originally published on May 20, 2016 3:14 pm

Most food, if we trace it back far enough, began as a seed. And the business of supplying those seeds to farmers has been transformed over the past half-century. Small-town companies have given way to global giants.

A new round of industry consolidation is now underway. Multibillion-dollar mergers are in progress, or under discussion, that could put more than half of global seed sales in the hands of three companies.

If there's anyone who can trace the course of this transformation, and explain what drove it, it's Ed Robinson.

For most of his life, Robinson ran the family business: the J.C. Robinson Seed Co. of Waterloo, Neb. He's 92 years old now, feisty and full of opinions, especially about the seed business.

"Here are two kernels of corn," he says, holding them up for me to inspect. "What the seed industry does is sell what's inside this kernel. And the only way that the farmer knows what's in there, is if he trusts the person who sold it!"

Seeds, with their hidden potential, are the lifeblood of agriculture, but the companies that sold them to farmers didn't always attract much attention.
There used to be hundreds of family-run companies just like J.C. Robinson scattered across the Midwest.

"They were a band of wonderful people," Robinson says.

Much of the work was mundane. They grew vegetables or grain, then collected the seeds carefully, dried them, sorted them and sold them to farmers.

There was, of course, competition among them. It was a race to create ever-more-productive seeds using plant breeding, cross-pollinating selected plants and selecting the best offspring.

The big companies did their breeding in-house. But smaller companies had other sources of top varieties, such as the breeding programs of universities. Those seeds were free for anyone to use.

One product of Iowa State University, a type of corn called B73, was so good that everybody used it. Its offspring had a distinctive look, with leaves pointing toward the sky.

"You could see it driving down the road," says Steve Pike, who owned part of Fontanelle Seed Co. in Fremont, Neb. "Probably 60 percent of the corn at one time got to be that upright leaf."

In 1970, J.C. Robinson partnered with several other seed companies and formed a group called Golden Harvest. It became one of the top five sellers of corn seed in the country. In the 1990s, J.C. Robinson built a big new seed processing plant and enlarged its headquarters in Waterloo.

And right about that time, the world changed.

Chemical companies like Monsanto found a way to genetically engineer crops. They inserted new genes into corn and soybeans, giving plants the power to kill insects, or survive weedkillers.

And farmers wanted those genes. Traditional seed companies, if they wanted to stay competitive, had to license those genes from their inventors. Many worried about being cut off from this new technology.

In 1998, Monsanto and other biotech companies started trying to buy some of the biggest seed companies outright. It gave them more control over an increasingly lucrative business.

Ed Robinson's son Rob says an offer arrived to buy Golden Harvest. "It was an amount beyond belief," he says. "I think it was $500 million."

The potential buyer — Robinson won't say which company — arrived for a meeting accompanied by advisers. They sat down with all five Golden Harvest partners — old seed company families.

"One of their advisers was sitting next to Dad," Rob Robinson says. "And this adviser was chanting '$500 million!' to the group of owners sitting there. It wasn't anything we'd experienced before."

That deal didn't go through. But in 2004, Golden Harvest agreed to be acquired by a Swiss-based company — Syngenta — for just under $200 million.

Rob Robinson has mixed feelings about the deal. "Originally, I regretted it. I felt that we needed to do it, for the future of the company. But I had sons ... "

Robinson stops midsentence, unable for a moment to keep talking.

He gathers himself. "I think the only regret is that we had another generation ready to come into the business," he says.

The big corn seed facility remains in Waterloo, and it's busy. But the top executives who decide its fate are now in Syngenta's headquarters in Basel, Switzerland. And soon, they may be sitting in Beijing. Syngenta has struck a deal to be acquired by Chem China, a state-owned enterprise there.

Meanwhile, other seed and pesticide companies are getting bigger, too. DuPont and Dow are merging. There are reports that Monsanto is in talks to buy either Bayer or BASF.

If the deals go through, it's estimated that three of these companies will control more than half of global seed sales.

Ed Robinson doesn't like it at all. "I wish the old-fashioned seed business were back," he says. "I think the farmer would be better off, and the U.S. would be better off."

But his son, Rob Robinson, says the changes were probably necessary. Without those big companies, he says, we wouldn't have the new technology.

"The dollars that it takes today, the investment it takes to do biotech research is massive, and difficult for an independent seed company like the J.C. Robinson Seed Co. to afford," he says.

But he has been able to resurrect one small piece of that old-fashioned world.

He's started a small but growing seed company, using the original name that his great-grandfather used: Rob-See-Co. Robinson says the company tries to operate in a way that takes farmers back to a less complicated time. "We're kind of a throwback. We're from a simpler world," he says.

He's also able to work with his two sons.

But he couldn't go back completely to the old times. He's not breeding his own new varieties and corn hybrids. The seeds he sells are supplied by Syngenta.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

STEVE INSKEEP, HOST:

The seed industry is consolidating. These are the people who sell the seeds that farmers use to grow our food. Small farms have given way to big ones for generations. And the same thing is happening to their suppliers. Small-town businesses have given way to global giants, which are now getting bigger. NPR's Dan Charles has the story.

DAN CHARLES, BYLINE: If there's anybody who can trace the history of the country's seed industry, it's Ed Robinson.

ED ROBINSON: I want to show you something.

CHARLES: We're in Robinson's home in the small town of Waterloo, Neb., just west of Omaha. Robinson is 92 years old. And for most of his life he ran the family business, the J.C. Robinson Seed Company. It grew vegetables and grain crops then collected the seeds carefully, dried them, sorted them and sold them to farmers under the brand Rob-See-Co.

E. ROBINSON: Here are two kernels of corn - right? What the seed business does is sell what's inside of this kernel.

CHARLES: Hidden potential to grow a good crop. Seeds are the lifeblood of agriculture, but they didn't always get much attention. There used to be hundreds of family-run seed companies just like J.C. Robinson's, scattered across the Midwest.

E. ROBINSON: They were a band of wonderful people.

CHARLES: There was competition among them, a race to create ever more productive seeds using plant breeding, cross pollinating plants and selecting the best offspring. The big companies did their breeding in-house. Smaller companies were able to get varieties from university researchers. Anybody could use those seeds. One university product, a variety of corn called B73, was so good everybody used it. Its offspring had a distinctive look with leaves pointing toward the sky.

STEVE PIKE: You could see it driving down the road.

CHARLES: This is Steve Pike, who was part owner of Fontanelle Seed Company in Fremont, Neb.. He's reminiscing with Ed Robinson's son, Rob Robinson.

PIKE: I don't know, Rob, I suppose 60 percent of the corn at one time got to be that upright leaf.

CHARLES: In 1970 J.C. Robinson Seed Company formed a partnership with other seed companies and called it Golden Harvest. It became one of the top five sellers of corn seed in the country. In the 1990s J.C. Robinson built a big new seed processing plant and headquarters in Waterloo. And right about then is when the world changed. Big chemical companies like Monsanto found ways to genetically engineer crops. They inserted new genes into corn and soybeans, giving plants the power to kill insects or survive weed killers. And farmers wanted those genes. In 1998 Monsanto and other biotech company started trying to buy out traditional seed companies, gave them more control over an increasingly lucrative business. Ed Robinson's son, Rob, says an offer arrived to buy Golden Harvest.

ROB ROBINSON: It was an amount beyond belief. I mean, I think it was something like $500 million.

CHARLES: The potential buyer - Robinson won't say which company it was - arrived with advisors in tow. They sat down with all five Golden Harvest partners.

R. ROBINSON: One of their advisors was sitting next to dad. And this advisor was chanting 500 million to the group of owners that were sitting there. It wasn't anything that we had experienced before.

CHARLES: That deal didn't go through. But in 2004 Golden Harvest agreed to be acquired by a Swiss-based company, Syngenta, for just under $200 million. Rob Robinson says he had mixed feelings about the deal.

R. ROBINSON: Well, I think originally I regretted it. I felt we needed to do it for the benefit of our - you know, to the livelihood of the company. But at the time I had sons.

CHARLES: He stops midsentence, unable to keep talking. He gathers himself again, goes on.

R. ROBINSON: Yeah, so I think the only regret is we had another generation ready to come into the business.

CHARLES: There's still a big factory bagging corn seed in Waterloo, Neb.. But the top executives who decide its fate are now in Syngenta's headquarters in Basel, Switzerland. And soon they may be sitting in Beijing. Syngenta struck a deal to be acquired by Chem China, a state-owned enterprise there. Meanwhile, other seed and pesticide companies are consolidating, too. Dupont and Dow are merging. There are reports that Monsanto's in talks to buy either Bayer or BASF. If those deals go through, three of these companies will control more than half of all global seed sales. Ed Robinson doesn't like it at all.

E. ROBINSON: I wish the old-fashioned seed business were back here. I think the farmer would be better off. The U.S. would be better off.

CHARLES: But his son, Rob Robinson, says it was probably necessary. Without those big companies, he says, we wouldn't have the new technology.

R. ROBINSON: I mean, the kind of dollars it takes today, the investment it takes today to do biotech research is massive and difficult for an independent company, J.C. Robinson Seed Company, was to be able to afford.

CHARLES: But he is resurrecting one small piece of the old-fashion world. He started a small but growing seed company using the original name that his great-grandfather used - Rob-See-Co. He says they try to operate in a way that takes farmers back to the small-town era.

R. ROBINSON: We're kind of a throwback. We're from a simpler world.

CHARLES: And he's able to work with his two sons. But he couldn't go back completely to the old times. He's not breeding his own new varieties or hybrid corn. The seeds he sells are supplied by Syngenta. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.